Tag Archives: Sprint

A few weeks ago, a previous article on Whim mentioned the potential merger of the No. 3 and 4 wireless cell phone providers: T-Mobile and Sprint. Now, however, the talks for a merger have quietly ended.

Both companies said in a joint statement that “they were unable to find mutually agreeable terms.”

photo from phonearena.com

Sprint and T-Mobile have discussed a merger for years now, but after news reports came out saying that Sprint’s parent company Softbank called off talks with T-Mobile, the end was coming to any potential merger.

Sprint’s stock dropped 11% before closing at $6.34 while T-Mobile’s stock went down 5%.

Originally, talks between the two companies were halted due the strict regulations imposed by the Obama administration in 2014. Those regulations were lifted by the Trump administration which allow for Sprint and T-Mobile to resume talks.

T-Mobile currently has over 70 million subscribers while Sprint has over 54 million subscribers. The merger between the two would had created the second biggest wireless carrier in the nation behind only AT&T which has over 134.5 million subscribers.

John Legere, the CEO and president of T-Mobile’s operations in the U.S. said “The prospect of combining with Sprint has been compelling for a variety of reason, including the potential to create significant benefits for consumers and value for shareholders.”

“However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders,” said Legere, his reasoning on why the merger failed.

Marcelo Claure, Sprint’s president and CEO said in a statement “We have agreed that it is best to move forward on our own.”

Both companies are moving forward with their heads up high and respect for each other even through the talks have ended. The two sides did not rule out a merger in future if things do change.

Once again, there are talks of a merger with the nation’s number 3 and 4 wireless providers. What does this mean for customers and the future of providers?

Logo from Consumerist

T-Mobile and Sprint have considered combining forces before. In 2014, they came close to a merger but due to the Obama Administration’s policies at the time, the merger would had been declined. Now with a new administration under President Trump, the companies have a renewed interest in a merger.

If the companies were to merge, here’s what might likely happen to customers of Sprint and T-Mobile.

Customers of T-Mobile right now get free Netflix and MLB.TV mobile viewing, which would mean Sprint customers would get those same perks. T-Mobile customers in return would get access to Tidal, a company that Sprint acquired a 33% stake in January. All customers would see an increase in pricing.

However, according to the former FCC chairman Tom Wheeler and former assistant to attorney general for the Antitrust Division of the Department of Justice, Bill Baer, prices will rise for customers due to the lack of competition, which was why Softbank failed to acquire T-Mobile.

The two companies would most likely be able to get a deal approved by the Trump Administration as they are “more willing listeners.” Donna Hitscherich, a senior lecturer at Columbia Business School stated, “Obviously, they are not going to do the deal and hope to lose subscribers, unless maybe there is a swath of subscribers that are not as profitable as others.”

Shares in both companies were up more than 4% since the news of a merger came out on Tuesday.

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